If you have turned on the news at all this past week, it is hard to miss all the lay-offs happening in corporate America, Caterpillar, Boeing, Circuit City and more. It seems like there has never been a worse time to look for a job. It may sound counter intuitive, but if you are a decision maker whose company is turning a profit (even a small one and yes, there are plenty out there), this is the best time to hire. In fact, I honestly believe if a company has cash flow, hiring is the best investment to make right now.
Why? Simple, it is like buying a stock when it is low. More candidates than companies hiring equals more competition for the job seeker and less room to negotiate salary. This recession is lasting long enough that even top performers are being affected and open to making a career move when in recent years they would not. A friend of mine who works at Boeing told me the company is laying people off who are overpaid! Why? These are quality employees, but for whatever reasons have increased their personal compensation higher than the Boeing can pay someone else. There is no doubt Boeing hires smart, talented employees. Yet, if even Boeing will not keep their salaries, these employees are looking at taking a step back in pay. Why not try to lure them onboard to your company now? When the economy picks back up, salaries will increase and these people will be harder to find.
In an economy like this, can your company afford to keep a mediocre employee on board? And even if so, does it make sense if a better employee can be found at the same price? Because it is the most cost efficient time to hire, this is a great opportunity to replace your average employee with an overachiever. There are more passive job seekers out there than there have been in recent years. These people may not have been impacted by lay-offs, but their job satisfaction is significantly lower and companies hiring have a much better chance to bring some strong talent onboard now than later.
I am not an expert when it comes to the economy or finance, but I get business. I believe there is no way for a company to succeed without talented people in the driving seat. The companies that make it through this recession and come out ahead will do so because they had right people working for them. The best employers will not let job responsibilities or even sales territories sit empty because we are in a recession. They should be select in whom they hire, but will benefit from these top producers and survive just fine.
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I never considered this benefit regarding the current recession. Trisha brings up many good points about why companies should capitalize on hiring right now. In the current state of the economy some companies cannot survive by simply ‘trimming the fat.’ Unfortunately, these companies must also resort to trimming a little muscle.
ReplyDeleteOne thing though, an overpaid employee is likely to be a quality employee, but this is NOT always the case. Sometimes, People are over compensated because they have bounced from company to company, and picked up raises in salary at every switch. One major reason these particular employees are laid off, during tough times, is because they lack loyalty in the company they are working for. In some situations, loyalty can be more important than raw performance.
Overall, very good blog!!! I look forward to gaining more great advice!
You are right Kyle! I remember working in 06 when many people wanted to make a move only for money and they could. It reminds me of the saying, short term gain but long term pain. Maybe it is the other way around, short term pain for long term gain?
ReplyDeleteIn any career, stability is important. It is to bad good talent is being let go of so fast. It just stresses the importance of thinking of a long term position vs. a stepping stone move.
Agree for the most part - I think you are more likely to make a large profit from a recession than when the economy is booming for reasons you stated.
ReplyDeleteA couple of things to think about - a) the economy may continue to get worse, which may make the employee salaries further negotiable, and b) also remember about employee morale when replacing average employees with great ones. Employee morale is huge in productivity in my opinion.
A.J.